Rent collection is one of the most tedious, yet gratifying, parts of being a landlord.
Every month, you collect on passive income that you can then, re-invest into your real estate investment portfolio and grow your wealth. It's your payday.
However, rent collection doesn't always go as planned. To avoid late rent and messy court cases, it is vital that you collect rent correctly and cover all your bases.
Here are the different rent collection methods you can use to collect rent.
Collect Rent Online
Technology is a gift, but especially so for rent collection.
Now, you can collect rent using ACH transfers or rent collecting software without having to pay your tenants a visit in person.
Many of these apps are user-friendly and include add-on features of tenant screening, such as credit checking, criminal records screening, and more.
However, these apps may take a few days to process your rent before the money gets into your hands.
For real estate investors with a smaller number of properties, this may work fine. However, this still requires work on your end to keep track of who paid rent and when.
Collect Rent In The Mail
Ah, the traditional method of communications: snail mail.
You can collect rent from your tenants by asking them to mail you a check, cash, or money order for rent.
Yes, your tenants can send you cash in the mail.
The popular misconception is that it is illegal to mail cash throughout the United States. But, Grandma and Grandpa do it every year for Christmas.
It really depends on the intention. As long as you're not defrauding the tax system or money laundering, you're good to collect rent via cash in the mail.
Keep in mind, though, your mail may get lost in the system and with it, your rent.
Your tenants may be better off paying via money orders, or writing checks, and keeping carbon copies if you choose to collect rent via mail.
Collect Rent In-Person
You can collect rent via the old-school way: in-person or with a dedicated drop-box placed in the common areas of your property.
Collecting rent in person ensures that you have the money in hand on rent day. However, this requires more work and more record-keeping.
If you don't live on the property, you have to make a visit every month just to collect rent. You also have to make sure that you record the rent payments and report them to avoid IRS penalties.
If memory and organization are not your strongest suits, collecting rent in person may be more work than you need.
Hire A Property Manager
One of the best ways to collect rent is to outsource the task to a property manager. They collect rent for you.
This means that you get to sit back and get paid on time every month. There's no more chasing down tenants for rent.
In addition to collecting rent, property managers maintain your property through maintenance coordination with contractors or an in-house team, and they regularly inspect your property for any damages.
If you have a number of real estate properties in the Salt Lake City area, Wolfnest's property managers can provide strategic portfolio management to keep your profits high and your expenses low.
We take care of all the nitty-gritty of rent collection, property maintenance, and investment portfolio management for you.
Work smarter, not harder.
Automate Your Rent Collection System
There are different ways you can go about collecting rent from tenants and the one you choose should work for your specific situation.
However, whether you have a single-family property or multi-family complex, you can automate your rent collection system by hiring a property manager.
If you're in the Salt Lake City area, and you're looking for skilled property managers, look no further.
Wolfnest can help you with the painful administrative task of rent collection, and scale your real estate investment portfolio. Give us a call!